It's been an… interesting week for Super Retail Ltd (ASX: SUL) stock, to say the least.
The ASX retail stock and owner of the Super Cheap Auto, Macpac, Rebel, and BCF brands had a dramatic day indeed on Thursday. The preceding day, investors were greeted with the news that the company had released a trading update after the markets had closed.
This trading update didn't contain a lot of positive news. It revealed that the company's group like-for-like sales growth came in at 0.4% for the first 18 weeks of its second half of FY 2026. Total sales growth for the same period was 1.9%, and 3.3% for the first 44 weeks of FY 2026.
Super Retail also told investors that sales momentum had been severely impacted by "inflationary pressures, including higher fuel prices and rising interest rates, together with concerns around fuel availability. The impact of this was felt particularly hard over the Easter weekend.
As a result of this update, Super Retail stock fell dramatically on Thursday morning, dipping more than 13.5% and hitting a new 52-week low of $10.08 a share at market open.
That pessimism didn't last long though, and Super Retail ended up finishing the day down just 2.9% yesterday. Today, much is forgiven, with the company rebounding a healthy 2.3% at the time of writing to $11.58 a share.
Despite this recovery, Super Retail stock has had a rough time of it lately. The company remains down 14% or so over the past 12 months, down 26.8% in 2026 to date, and down almost 40% from the highs of September last year.
Perhaps this miserly performance has a silver lining, though. At current prices, Super Retail stock is trading on a trailing dividend yield of 5.7%.
Is Super Retail stock worth the 5.7% dividend yield right now?
That yield is obviously a pretty compelling proposition for income investors today. However, I don't think it's a screaming buy. Super Retail, as a consumer discretionary stock, is vulnerable to what's going on in the wider economy. With petrol prices still elevated and with interest rates rising, the company is clearly under strain at the moment.
Unfortunately for Super Retail, the reality is that when times are tough, people tend to cut back on exactly the kinds of products that this company sells – camping and fishing gear, sporting apparel, and automotive products.
As such, I wouldn't be surprised to see a dividend cut when the company reveals its final dividend for 2026 later this year.
Saying that, there is still the potential for Super Retail to be a significant source of income for dividend investors. I would still be happy to have this stock as a part of a diversified income-focused portfolio if that were my primary investing goal. Even so, I think this high dividend yield indicates risk and is not a sure thing. As such, I wouldn't be betting the farm on it today.
The post 5.7% yield: Is Super Retail stock a buy for dividend investors? appeared first on The Motley Fool Australia.
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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